RANCHO MIRAGE (CALIFORNIA) — South-east Asia and America should work ­together to create value through ­innovation and entrepreneurship so as to build a prosperous Pacific Rim, said Singapore Prime Minister Lee Hsien Loong today (Monday afternoon, California time).

“To achieve prosperity for all our citizens, we need to go beyond lower costs or adding value. Instead, we need to create value — through innovation and entrepreneurship,” he said during a retreat session on innovation and entrepreneurship at the special United States-Association of South-east Asian Nations (US-ASEAN) summit here.

To create value, the grouping will need to further strengthen economic integration, he said, adding that the ASEAN Economic Community (AEC), formally declared in December with the primary goal of turning the region into a single market and production base, offers great ­potential for promoting innovation and ­entrepreneurship.

“No single ASEAN member country can match the size, the wealth and the sophistication of the American market, with 300 million plus consumers. But if you take ASEAN, it is a significant single market and production base, with a combined population of 600 million,” he said, adding that the region’s young and rising middle class meant it will be a significant consumer market in the future.

“The more we can bring ASEAN together as one market, the more we can replicate for ourselves some of the tremendous advantages that America enjoys as one barrier-free market.”

Each of the 10 ASEAN members can also cultivate a business-friendly environment and come up with policies to promote research, innovation and entrepreneurship, said Mr Lee.

He cited as an example how Singapore has tried to create an ecosystem friendly to start-ups and is beginning to see some results, with private sector R&D and the number of start-ups both more than doubling in 10 years.

US President Barack Obama is hosting the 10 ASEAN leaders at the Sunnylands Estate in California, in what is seen as the high point of the White House’s policy of rebalancing towards Asia. In his opening remarks, Mr Obama said the formation of the AEC was an important step towards integrating South-east Asia’s economies.

“Here at this summit, we can build on this progress and do more than just to promote innovation and entrepreneurship so that the growth and ­development is sustainable and inclusive and benefits all people,” he said.

In a Facebook post today, Mr Lee said he was happy to meet Mr Obama again. “This afternoon we focused on how to promote an innovative, entrepreneurial ASEAN Economic Community. Singapore welcomes the US initiative to help ASEAN do this, which will complement our ­individual efforts,” he said, adding that Singapore has much to learn from American ­entrepreneurial culture.